nep-dev New Economics Papers
on Development
Issue of 2014‒04‒11
seventeen papers chosen by
Jacob A. Jordaan
Utrecht University

  1. Cash transfers and child labor By de Hoop, Jacobus; Rosati, Furio C.
  2. Do poverty traps exist ? By Kraay, Aart; McKenzie, David
  3. Savings in Transnational Households: A Field Experiment among Migrants from El Salvador By Nava Ashraf; Diego Aycinena; Claudia Martínez A.; Dean Yang
  4. Poverty and Crime: Evidence from Rainfall and Trade Shocks in India By Lakshmi Iyer; Petia Topalova
  5. Learning the hard way? Adapting to climate risk in Tanzania By Waage Skjeflo, Sofie; Bruvik Westberg, Nina
  6. Assessing Foreign Aid.s Long-Run Contribution to Growth in Development By Arndt, Channing; Jones, Sam; Tarp, Finn
  7. School Resources, Behavioral Responses and School Quality: Short-Term Experimental Evidence from Niger By Elizabeth Beasley; Elise Huillery
  8. Differential Impacts of Foreign Capital and Remittance Inflows on Domestic Savings in the Developing Countries: A Dynamic Heterogeneous Panel Analysis By Delwar Hossain
  9. Poverty Persistence and Intra-Household Heterogeneity in Occupations: Some Evidence from Ethiopia By Alem, Yonas
  10. Buffer Stock Savings by Portfolio Adjustment: Evidence from Rural India By Samuel Kobina Annim; Katsushi S. Imai
  11. International Labor Mobility and Child Work in Developing Countries By De Paoli, Anna; Mendola, Mariapia
  12. Post-harvest loss in Sub-Saharan Africa -- what do farmers say ? By Kaminski, Jonathan; Christiaensen, Luc
  13. Impact of sectoral allocation of foreign aid on gender equity and human development By Pickbourn, Lynda; Ndikumana, Leonce
  14. Life-Satisfaction in Urban Ethiopia: The Role of Relative Poverty and Unobserved Heterogeneity By Alem, Yonas
  15. Foreign aid and mobilization of growth factors in sub-Saharan Africa By Douzounet Mallaye; Yogo Thierry Urbain
  16. The Informal Sector Wage Gap: New Evidence using Quantile Estimations on Panel Data By Olivier Bargain; Prudence Kwenda
  17. The impact of an adolescent girls employment program : the EPAG project in Liberia By Adoho, Franck; Chakravarty, Shubha; Korkoyah, Jr, Dala T.; Lundberg, Mattias; Tasneem, Afia

  1. By: de Hoop, Jacobus; Rosati, Furio C.
    Abstract: Cash transfer programs are widely used in settings where child labor is prevalent. Although many of these programs are explicitly implemented to improve children's welfare, in theory their impact on child labor is undetermined. This paper systematically reviews the empirical evidence on the impact of cash transfers, conditional and unconditional, on child labor. The authors find no evidence that cash transfer interventions increase child labor in practice. On the contrary, there is broad evidence that conditional and unconditional cash transfers lower both children's participation in child labor and hours worked and cushion the effect of economic shocks that may lead households to use child labor as a coping strategy. Boys experience particularly strong decreases in economic activities, girls in household chores. The findings underline the usefulness of cash transfers as a relatively safe policy instrument to improve child welfare, but also point to knowledge gaps, for instance regarding the interplay between cash transfers and other interventions, that should be addressed in future evaluations to provide detailed policy advice.
    Keywords: Street Children,Labor Policies,Youth and Governance,Children and Youth,Debt Markets
    Date: 2014–03–01
  2. By: Kraay, Aart; McKenzie, David
    Abstract: This paper reviews the empirical evidence on the existence of poverty traps, understood as self-reinforcing mechanisms through which poor individuals or countries remain poor. Poverty traps have captured the interest of many development policy makers, because poverty traps provide a theoretically coherent explanation for persistent poverty. They also suggest that temporary policy interventions may have long-term effects on poverty. However, a review of the reduced-form empirical evidence suggests that truly stagnant incomes of the sort predicted by standard models of poverty traps are in fact quite rare. Moreover, the empirical evidence regarding several canonical mechanisms underlying models of poverty traps is mixed.
    Keywords: Rural Poverty Reduction,Achieving Shared Growth,Economic Theory&Research,Debt Markets,Poverty Reduction Strategies
    Date: 2014–04–01
  3. By: Nava Ashraf; Diego Aycinena; Claudia Martínez A.; Dean Yang
    Abstract: We implemented a randomized field experiment that tested ways to stimulate savings by international migrants in their origin country. We find that migrants value and take advantage of opportunities to exert greater control over financial activities in their home countries. In partnership with a Salvadoran bank, we offered U.S.-based migrants bank accounts in El Salvador. We randomly varied migrant control over El Salvador-based savings by offering different types of accounts across treatment groups. Migrants offered the greatest degree of control accumulated the most savings at the partner bank, compared to others offered less or no control over savings. Impacts are likely to represent increases in total savings: there is no evidence that savings increases were simply reallocated from other savings mechanisms. Enhanced control over home-country savings does not affect remittances sent home by migrants.
    JEL: F22 O16
    Date: 2014–03
  4. By: Lakshmi Iyer (Harvard Business School; Business, Government and the International Economy Unit); Petia Topalova (International Monetary Fund (IMF))
    Abstract: Does poverty lead to crime? We shed light on this question using two independent and exogenous shocks to household income in rural India: the dramatic reduction in import tariffs in the early 1990s and rainfall variations. We find that trade shocks, previously shown to raise relative poverty, also increased the incidence of violent crimes and property crimes. The relationship between trade shocks and crime is similar to the observed relationship between rainfall shocks and crime. Our results thus identify a causal effect of poverty on crime. They also lend credence to a large literature on the effects of weather shocks on crime and conflict, which has usually assumed that the income channel is the most relevant one.
    Keywords: Rainfall, Weather, Crime, Trade Liberalization, India
    JEL: D74 I38 Q34 Q56
    Date: 2014–04
  5. By: Waage Skjeflo, Sofie (Centre for Land Tenure Studies, Norwegian University of Life Sciences); Bruvik Westberg, Nina (Centre for Land Tenure Studies, Norwegian University of Life Sciences)
    Abstract: We use recent panel data on Tanzanian farm households to investigate how previous exposure to weather shocks affects the impact of a current shock. Specifically, we investigate the impact of droughts on agricultural outcomes and investments in children's health, measured by their short- and long-term nutritional status. As expected, we find that droughts negatively impact yields, and more so the more severe the drought is. We also find suggestive evidence that the more shocks a household has experienced in the past, the less crop yields are affected by a current shock. This suggests that households are able to learn from their past shock experience, and could imply that households are able to adapt to climate risk. Our results also suggest that the impact of a shock depends on when the household last experienced a shock. In terms of child health, our preliminary results are unable to uncover any clear shock impact on the short-term nutritional status of children, however long-term nutritional outcomes are negatively affected by past shocks. Further analyses using more recent weather data is necessary in order to conclude.
    Keywords: Climate risk; income shocks; adaptation; child health; Tanzania
    JEL: I12 I13 Q12 Q54
    Date: 2014–04–03
  6. By: Arndt, Channing; Jones, Sam; Tarp, Finn
    Abstract: This paper confirms recent evidence of a positive impact of aid on growth and widens the scope of evaluation to a range of outcomes including proximate sources of growth (e.g., physical and human capital), indicators of social welfare (e.g., poverty and i
    Keywords: growth, foreign aid, aid effectiveness, simultaneous equations
    Date: 2013
  7. By: Elizabeth Beasley; Elise Huillery (Département d'économie)
    Abstract: Increasing school resources has often shown disappointing effects on school quality in developing countries, a lack of impact which may be due to student, parent or teacher behavioral responses. We test the short-term impact of an increase in school resources under parental control using an experimental school grant program in Niger.
    JEL: H52 O15 I21 I28
    Date: 2013–04
  8. By: Delwar Hossain
    Abstract: The study examines the role of foreign capital and remittance inflows in the domestic savings of 63 developing countries for 1971-2010, paying attention to likely differential effects of FDI, portfolio investment, foreign aid and remittance. The conventional homogeneous panel estimates suggest that foreign aid and remittance flows have a significant negative impact on domestic savings. However, these techniques ignore cross section dependence and parameter heterogeneity properties and thus yield biased and inconsistent estimates. When we allow for parameter heterogeneity and cross sectional dependence by employing the Pesaran’s (2006) Common Correlated Effects Mean Group estimator technique, only remittances crowd-out savings.
    Keywords: Domestic savings, Foreign capital inflows, Foreign Aid. Models with panel data
    JEL: C23 E21 E22 F21 F35
    Date: 2014
  9. By: Alem, Yonas
    Abstract: Previous studies of poverty in developing countries have to a great extent focused on the characteristics of the household head and used these as proxies for the underlying ability of the household to generate income. This paper uses five rounds of panel data to investigate the persistence of poverty in urban Ethiopia with a particular focus on the role of intra-household heterogeneity in occupations. Dynamic probit and system GMM regression results suggest that international remittances and labor market status of non-head household members are important determinants of households' poverty status. Results also show that controlling for these variables and the initial conditions problem encountered in non-linear dynamic probit models reduces the magnitude of estimated poverty persistence significantly for urban Ethiopia. These findings have important implications for identifying the poor and formulating effective poverty reduction and targeting strategies.
    Keywords: Urban Ethiopia, poverty persistence, dynamic probit, system GMM, labor market status
    JEL: I32 R11 R20
    Date: 2014–03–05
  10. By: Samuel Kobina Annim (Department of Economics, University of Cape Coast, Ghana); Katsushi S. Imai (School of Social Sciences, University of Manchester (UK) and RIEB, Kobe University (Japan))
    Abstract: The empirical literature of household savings tends to treat savings as "a black box" defined as annual income minus consumption. This paper takes a unique approach to reconstruct the cash and asset balances using the detailed household transaction data of farm households in rural India and generates the long monthly and seasonal panel data. We have found that households - both the poor and the relatively affluent in terms of landholding classes - cope with temporary shocks quite well using crop inventory, currency and capital assets, rather than livestock, as buffer. The importance of portfolio adjustment in smoothing consumption is also confirmed by the system equation in which both portfolio and production decisions are made endogenous. It is concluded that not only the level but also the diversification of household assets are important for buffering consumption.
    Keywords: Diversified diet, Livestock, Ethnicity, Height-for-age, Weight-for-Age and Weight-for-Height, Lao PDR
    JEL: I12 I18 Q18
    Date: 2014–03
  11. By: De Paoli, Anna (University of Milan Bicocca); Mendola, Mariapia (University of Milan Bicocca)
    Abstract: This paper investigates the labor market effect of international migration on child work in countries of origin. We use an original cross-country survey dataset, which combines information on international migration with detailed individual-level data on child labor at age 5-14 in a wide range of developing countries. By exploiting both within- and cross-country variation and controlling for country fixed effects, we find a strong empirical regularity about the role of international mobility of workers in reducing child labor in disadvantaged households through changes in the local labor market.
    Keywords: international migration, child labor, factor mobility, cross-country survey data
    JEL: F22 F1 J61
    Date: 2014–03
  12. By: Kaminski, Jonathan; Christiaensen, Luc
    Abstract: The 2007-2008 global food crisis has renewed interest in post-harvest loss, but estimates remain scarce, especially in Sub-Saharan Africa. This paper uses self-reported measures from nationally representative household surveys in Malawi, Uganda, and Tanzania. Overall, on-farm post-harvest loss adds to 1.4-5.9 percent of the national maize harvest, substantially lower than the Food and Agriculture Organization's post-harvest handling and storage loss estimate for cereals, which is 8 percent. Post-harvest loss is concentrated among less than a fifth of households. It increases with humidity and temperature and declines with better market access, post-primary education, higher seasonal price differences, and possibly improved storage practices. Wider use of nationally representative surveys in studying post-harvest loss is called for.
    Keywords: Markets and Market Access,Crops and Crop Management Systems,Food&Beverage Industry,Technology Industry,Environmental Economics&Policies
    Date: 2014–04–01
  13. By: Pickbourn, Lynda; Ndikumana, Leonce
    Abstract: While developing countries have made some progress in achieving human development since the turn of the century, many are still lagging behind in important human development goals such as education, health, nutrition and access to clean drinking water and
    Keywords: foreign aid, human development, gender equity, education, health
    Date: 2013
  14. By: Alem, Yonas
    Abstract: Unlike most studies of subjective well-being in developing countries, we use a fixed effects regression on three rounds of rich panel data to investigate the impact of relative standing on life satisfaction of respondents in urban Ethiopia. We find a consistently large negative impactof relative standing -- both relative to others and to oneself over time -- on subjective well-being. However, controlling for unobserved heterogeneity through a fixed effects model reduces the impact of the relative standing variables on subjective well-being by up to 24 percent and reduces the impact of economic status by about 40 percent. Our findings highlight the need to be cautious in interpreting parameter estimates from subjective well-being regressions based on cross-sectional data, as the impact of variables may not be disentangled from that of unobserved heterogeneity.
    Keywords: life satisfaction, urban Ethiopia, relative standing, fixed effects
    JEL: O12 I30 I31
    Date: 2014–03–05
  15. By: Douzounet Mallaye; Yogo Thierry Urbain
    Abstract: This study addresses the macroeconomic effect of foreign aid on the factors of growth. Specifically, we examine the effects of foreign aid on capital investment (human capital, physical capital) in sub-Saharan Africa. Our methodological approach evaluates
    Keywords: foreign aid, physical capital, human capital, panel data, Africa
    Date: 2013
  16. By: Olivier Bargain (AMSE - Aix-Marseille School of Economics - Centre national de la recherche scientifique (CNRS) - École des Hautes Études en Sciences Sociales (EHESS) - Ecole Centrale Marseille (ECM), IZA - Institute for the Study of Labor); Prudence Kwenda (University of Witwatersrand - University of Witwatersrand)
    Abstract: We estimate the informal-formal sector pay gap throughout the conditional wage distribution using panel data from Brazil, Mexico and South Africa. We control for time-invariant unobservables and identification is stemming from inter-sector movers. We control for observables in a non-linear way using propensity score reweighting and carefully check for potential measurement errors. Using similar definitions of informality, we obtain consistent results for all three countries: Informally employed workers earn much less than formal workers primarily because of lower observable and unobservable skills. Estimates of the conditional wage gap show that they are also underpaid compared to their formal sector counterparts. In all three countries, the informal wage penalty is larger in the lower part of the conditional distribution and tends to disappear at the top, i.e., the informal sector increases wage dispersion. The magnitudes of these effects vary across countries, with the largest penalties in lower conditional quantiles of South Africa and more modest wage gaps in Latin America. We suggest explanations in line with different legal and labor market conditions.
    Keywords: wage gap; informal sector; quantile regression; fixed effects; propensity score; conditional random effects
    Date: 2013–12
  17. By: Adoho, Franck; Chakravarty, Shubha; Korkoyah, Jr, Dala T.; Lundberg, Mattias; Tasneem, Afia
    Abstract: This paper presents findings from the impact evaluation of the Economic Empowerment of Adolescent Girls and Young Women (EPAG) project in Liberia. The EPAG project was launched by the Liberian Ministry of Gender and Development in 2009 with the goal of increasing the employment and income of 2,500 young Liberian women by providing livelihood and life skills training and facilitating their transition to productive work. The analysis in this paper is based on data collected during two rounds of quantitative surveys in 2010 and 2011, the second of which was conducted six months after the classroom-based phase of the training program ended. Strong impacts are found on the employment and earnings outcomes of program participants, relative to a control group of non-participants. The EPAG program increased employment by 47 percent and earnings by 80 percent. In addition, the impact evaluation documents positive effects on a variety of empowerment measures, including access to money, self-confidence, and anxiety about circumstances and the future. The evaluation finds no net impact on fertility or sexual behavior. At the household level, there is evidence of improved food security and shifting attitudes toward gender norms. These results reinforce the highly positive feedback received from focus group discussions with program participants. Finally, preliminary cost-benefit analysis indicates that the budgetary cost of the EPAG business development training for young women is equivalent to the value of three years of the increase in income among program beneficiaries. These preliminary results provide strong evidence for further investment and research into young women's livelihood programs in Liberia.
    Keywords: Primary Education,Population Policies,Education For All,Access&Equity in Basic Education,Labor Policies
    Date: 2014–04–01

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